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2011 (9) TMI 111 - AT - Income TaxQuashing / deleting the penalty u/s 221(1) holding that no proper opportunity has been given to the assessee before imposing the penalty. - The AO should wait for finalization of quantum appeal u/s 201(1) up to ITAT state and then impose penalty if any arises.- Demand notice u/s 156 for outstanding demand was not served on the assessee and, therefore, the assessee cannot be deemed to be an assessee in default. Regarding no proper opportunity of being heard given to Assessee. - held that:- AO had issued notice on 30th Nov.09 asking the assessee to deposit the amount by 7/12/2009. The assessee sent reply dated 11/12/2009 explaining its financial difficulties. Therefore, we do not find any substance in the contention of the assessee that no proper opportunity of being heard was provided before imposition of penalty. Regarding notice u/s 156. - Held that:- Assessee was deemed to be in default in respect of TDS u/s 200 & not in consequence of an order passed by AO for which demand notice u/s 156. decided against Assessee. Imposition of penalty by AO. - Held that:- There is no provision of law to wait for finalization of the quantum appeal before levying penalty. decided against Assessee.
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